Australian couple become first foreign property owners in vietnam
Ha Long Bay, Vietnam, is already hugely popular with foreign tourists Photo: Guido da Rozze
The Change in regulations, which came into force at the start of July 2015, allow limited ownership of Vietnamese real estate by foreigners for the first time.
Previously, only foreigners who were married to Vietnamese citizens were allowed to purchase property in the country. Now, though, non-residents granted a valid visa are allowed to buy residential property, including condos, villas and townhouses. There is no limit on the number of units a foreigner may purchase, although they are not permitted to own more than 30 per cent of any apartment building or 250 houses per ward. Properties are owned for 50 years, with an option to extend the leasehold for another 50 years.
The amendment comes at a time when foreign investors are showing increasing interest, according to Savills.
Indeed, Haig and Katrin Conolly wasted no time to sign the contract for their new apartment: the transaction was completed at 12:01am on 1st July 2015.
The couple purchased a three-bed unit in Saigon's City Garden development, which consists of 950 luxury apartments across six tower blocks, with one-bed units available for $177,000.
Mr Conolly, , and Ms Conolly, an interior designer, met in Vietnam 21 years ago when he was working on a project there and she was on vacation from her job as a top fashion model in her home country, Germany.
"It's a real opportunity," Mr. Conolly, founder of Sydney marketing consultants Lloyds Property, told News.domain.com.au.
"The second phase of the development is about to come on stream and, no bones about it, I will be promoting these apartments to clients in Australia," he added.
The industry reaction has been positive since the announcement of the new laws last year.
The plans for opening up the market were revealed as Vietnam's economy grew 5.8 per cent.
"The economic recovery is a good sign for foreign businesses to expand their investment in the property market," Pham Sy Liem, deputy chairman of the Vietnam Construction Federation, told Thanhniennews.com.
During the booming years of 2007 and 2008, Liem noted, real estate accounted for half of all foreign direct investment in the country.
Indeed, new figures from goverment have revealed that property sales in the first half of 2015 doubled from a year ago in major cities, including Hanoi and Ho Chi Minh City. Property inventory fell 3.2 per cent, reports Reuters.
Duong Thuy Dung, director of research and consulting at CBRE Vietnam, revealed that they have been receiving "around five emails a day" during the past fortnight from curious foreign investors, including individual buyers.
She said, though, that it will take some time for confidence to build and a level playing field to form, with a major impact not expected immediately.
"It needs at least five years to see if the property rebound is sustainable," she told Thanhniennews.com, urging developers to market projects overseas to attract foreign customers.
"I believe those who get in earliest will benefit most," added Haig.